Bitcoin seems unstoppable in its climb as it now makes its way above the top of the descending triangle visible on the daily time frame. This chart pattern spans $6,400 to around $12,000 so the resulting rally could be of the same size.
However, the 100 SMA is still below the longer-term 200 SMA on this time frame, so the path of least resistance might remain to the downside. In other words, there’s still a chance for the slide to resume or for bitcoin to fall back inside the triangle pattern.
Price is starting to push past the 100 SMA dynamic inflection point just slightly above the triangle top, though, so bullish momentum is already building up. Bitcoin could make its way up to test the 200 SMA dynamic resistance next, and a break higher could open the floodgates for stronger gains.
RSI is already in the overbought region to signal exhaustion among buyers, and turning back down could bring selling pressure back to the mix. In that case, bitcoin could retest the broken triangle top or move all the way back down to the bottom. Stochastic has reached overbought territory as well, so sellers could take over from here.
Bitcoin has had a strong run at the start of the quarter and again last week, driven partly by a pickup in institutional attention. Many say that this also marks the start of a strong rebound that could last until the end of the year, bringing it to the price targets of at least $20,000.
In addition, billionaire investor and co-founder of Avenue Capital Group predicted that bitcoin price could reach as high as $40,000 over the next couple of years. The recent price surge was enough to catapult it back to the heap, and investors are looking to the SEC decision on the bitcoin ETF fund next.